How Body20 is Transforming Fitness Franchising with Emerging Technology

Leslie Kuban:
Guys, welcome to the show.

Bob McQuillan:
Thank you, Leslie.

Leslie Kuban:
Really glad to hear. I’m very excited about the Body20 concept and excited to share about it with our viewers. And Bob, I’m going to ask you first. So what is EMS?

Bob McQuillan:
Sure. So Leslie, first of all, thank you for having Chris and I on the show today. We really appreciate it. We were looking forward to this as well. EMS, so most people have not heard of this. I call it one of those best-kept secrets or the silver bullet that everyone’s been looking for. EMS technology, it stands for electromuscular stimulation. So what happens is you get in a suit provided by Body20. We basically work people out in this suit. Attached to the suit… Well, actually there’s a machine that’s attached to the suit via a cord. And what happens is that machine delivers electronic impulses or signals to your muscles.
So we as human beings, when we lift weights, our muscles have to contract. And to put this in perspective for the audience, if you were to go to a weight lifting session for 90 minutes or more, on average, your muscles will contract about 1,500 times. Our suit in 20 minutes will make your muscles contract 36,000 times. You’ll burn between 700 and 1,000 calories and it is the equivalent of doing hours of weight training in a 20-minute period. It is an amazing workout and it’s recommended just twice a week. And for that, you can burn calories and gain muscle as well. The big thing with EMS is we trade the bad weight for good weight. So taking away the fat and adding muscle.

Leslie Kuban:
That’s exciting. So I feel like I’d be the bionic woman if I come in and put on the suit, yes?

Bob McQuillan:
More bionic than you are today, Leslie, if that’s possible.

Leslie Kuban:
So I have a feeling I know who the customer is. I feel like I am the target demographic, aren’t I? Who are your customers for Body20?

Chris Pena:
So our average customer is 40-plus-year-old professional. We trend about 70% female base. Like a lot of boutique fitness brands, we’re going to be on the mom loop. It’s people who have a time crunch. And I think the best part about Body20, however, is that we really truly can serve everybody. We do take the weight out. So I have clients as old as 93. I have pro NFL football players who come into the studios regularly to take their performance to the next level.

Leslie Kuban:
So did I hear you right? It’s a 20-minute workout that is the equivalent of a couple of hours of weight lifting. That that’s huge for time-starved people like me and other professionals, parents. So I would imagine that the time saving part is a big benefit to this type of fitness program. Is that right?

Chris Pena:
Absolutely. I think the best way to look at it, Bob hinted at it earlier, is the average person gets about 1,500 contractions in the gym. When you talk about business, for instance, you talk about income-producing activity, what drives that bottom line. When you talk about fitness, you really should be talking about muscle-changing activity, which is muscle contraction. And I think there’s two main factors in contraction to build hyper trophy or build muscle. And that is time under tension and load. How much weight am I moving and how long am I doing it? So that really gets distilled down into contractions. Well, in one singular session, we’re giving you 36,000 contractions in those 20 minutes. We are able to take the brain out of working out, so your skill level, your ability, your amount of time you’ve been in the gym is just gone. And it really comes down to what we can do for you. It’s equivalent to about four to six hours in the gym.

Leslie Kuban:
And Chris, you’re the founder. So tell us a little bit about your story, how you got inspired to launch this type of a business.

Chris Pena:
Sure. So that saying, behind every great man is an even greater woman, right? My now wife, only a couple of weeks, actually, we had moved to Florida, and I was pretty set in my career, and she actually had decided she didn’t want to be a teacher anymore. And so she started looking for what she wanted to do. When I first met her, I owned a couple of gyms. And so she wanted to get back into fitness. And we actually started by looking at franchising. And I for one would not make a great franchisee, so we did not go down that path.
But we did end up meeting a gentleman from South Africa. And when we met him, Kenzie had just competed in the Florida state show. She used to do NPC bikini shows, and this incredibly fit girl who was doing an hour of cardio in the morning when she woke up, an hour and a half of weight training, probably 45 minutes of cardio before bed. So needless to say, incredibly in shape, incredibly conditioned. I watched somebody put a suit on her, and in 12 minutes, she was just on the ground, sweating, panting, done. And our first sessions are 12 minutes to ease you in because it’s a lot more strenuous than you would think.
But in that moment, I just kind of knew. I had had a bodybuilding, power lifting gym. I grew from one to three locations in the past, and I knew this was the next big thing. And I had two major questions. One was, A, I’ve trained body builders and owned gyms for… I’ve been in the industry for five years. How did I never hear of this? And that was really easy answer, which was the FDA. We needed to get FDA cleared first. So EMS has been around in the retail world in Europe for just over 40 years, 45 years. For some perspective, in Munich, Germany alone, there’s over 1,400 locations in one city. And then the second piece was why isn’t somebody incredibly wealthy? This is the magic bill for everybody. And they sent me a couple of articles on a few brands in Europe that had hundreds of locations. And so it made it clear that it wasn’t new. It was new to us in the United States. And shortly after, FDA approval was received and we started our first studio.

Leslie Kuban:
And that’s exciting. So you didn’t go down the franchising route as a franchisee, Chris, but you decided to go down the route as a franchisor. And I recall when I first got started to get to know you, you got into franchising, you grew with some franchises, but you realized you needed to do some work. And so you took a break from your franchising pathway and made some investments and made some improvements. And I’d love our audience to hear a little bit about that. What was missing? What needed to be done that you recognized before you really launched your franchising strategy further?

Chris Pena:
Absolutely. I think one core thing you’ll hear us talk about if anybody ever goes down the discovery path or even gets to know us for five minutes, you’ll hear us talk about unit economics, unit economics, unit economics. When we first decided to franchise, it happened because our unit, mine and Kenzie’s unit just, it exploded. It was profitable faster than I’d ever seen a business be profitable. We returned our investment faster than I’d ever seen it. And the gentleman we had met from South Africa, he had some franchising experience in South Africa. It was really, for me, I had just scaled a company from a little over 100 to a little over 300 employees in an executive role. And so I had no time. So we brought this guy in. He wanted to franchise with us. We covered the bill and had him come in and realized very quickly that franchising the US and in South Africa is not right.
And I think I’d met our other two partners, Greg and Kerry at that time. And one thing that I think rings true is we just cared a lot about the fact that those first five franchisees didn’t get what they paid for. And so we said, “We’re not going to sell a single franchise. We’re not going to do that. We’re going to make sure we fix this thing.” We put our heads together. And I’ll never forget me and Greg, our CEO, we sat down, partner as well, sat down in our conference room at our original office and just locked ourselves in for two days and said, “Let’s write a list of everything that’s wrong, everything that we don’t know if is right. And then until we have answers to these things, we’re not leaving this room.”
And we came out essentially saying we had to focus on unit economics. We wanted a better return. We knew that we had a higher-end offering. Our customer base was naturally a more affluent person, but our brand didn’t match that. And so we needed to fix that as well. And we spent the next two and a half to three years and probably a combined $4 million of investment building this brand to a point to where… I always find this funny when I explain this story. One day, we looked up and we were talking to a consultant, and we regularly brought in franchise experts and consultants to tell us whether or not we were ready to sell. This was always the big question.
And I remember, he looked at and he kind of laughed. And he was like, “You should have started selling two years ago. What are you doing?” So that was when we started reaching out and talking to different people and going down the development path. And luckily, met Bob, who had just scaled Hand and Stone, to being probably one of the most dominant, if not the most dominant massage brand in the country. And Bob decided he didn’t want to be retired anymore. We were lucky enough to get him.

Leslie Kuban:
And Bob, what would you add to this conversation? With all your wealth of franchising experience and scaling with a franchise brand, what would you add to the conversation about this?

Bob McQuillan:
Yeah. It’s a great question. I think when hearing you ask that, I’m drawn back to my memory of when I retired, my thought process was I didn’t last very long in that role of a retiree. I just started a consulting business. But I always thought to myself, if I’m ever going to come out of retirement, it’s going to be for the unicorn. It’s going to be for that one brand that opens up and does incredible amounts of revenue in the beginning and then continues on, and it’s fun, and people love it. And there’s just not many brands like that. First of all, talking with Chris, he’s a young, extremely intelligent energy guy. I don’t think he sleeps two hours a night. And he’s an incredible talent and knows as much about EMS fitness in this country as most people.
But what I was really drawn to is the model they built. Leslie, you’ve been around franchising. Nobody stops selling franchises for a year and a half and perfects a model and invests millions in it to do it. Well, I found that brand. And then in Chris and Greg and Carey, our partners, I found an incredible group of people that I really wanted to work with.

Leslie Kuban:
So this is new. This is not something that everybody has heard of. And so I know there’s people who should and would be asking questions about, well, what is the longevity of this modality of fitness? And is it safe? You’re putting a suit on someone’s body and it’s electrifying their muscles. So how do you address the longevity and maybe safety questions that people might have about the business?

Bob McQuillan:
Yeah. There’s a couple of different ways I can answer it. I think that your view viewers will specifically be drawn to the answer here because it would affect everyone. So there’s a couple of things. When people look at this business that they… One, it’s the time. It’s all about time. To speak to the longevity of it first, when I look at this business and when I first looked at this business to evaluate it, I kind of thought it was hokey. I thought maybe this is a fad, until I really understood what I was talking about. And like Chris, just six, seven years ago, I was doing triathlons. So I’m a guy that’s been involved in fitness for a long, long time. And then I look at this. I’m like, “How could I have never heard of this?”
Well, after doing some research and understanding more from Chris as well as my own independent research, this has been around for, as Chris mentioned, 30 to 40 years or a little bit more than 40 years in Europe and other countries. So one of the major things and my belief and why I thought this was so unbelievable, in coming into Body20, we have four medical doctors that are franchisees. As Chris alluded to in that story, that surgeon, who was one of the prominent Lap-Band surgeons in the country, is doing research now on the effects of rehabilitation post-surgery. Those things are incredible.

Leslie Kuban:
Well, I’m excited to be a customer. I know you have some locations opening in the Greater Atlanta area soon, and I’ll be one of the first customers because I got this immediately when I started to learn about it, just the safety aspect, the time savings aspect for busy professionals like myself, who are concerned about my wellbeing and my health but need a way to make it fit into my schedule. So I’m really excited to see you guys grow and I’m very delighted to be partnered with you.

Bob McQuillan:
We’re looking forward to it. We’ll get you suited up and we’ll treat you the right way, and you’ll be in shape, well, even better than you look today.

Leslie Kuban:
So one final question for you guys. In the spirit of a lot of our viewers are folks who have worked in a career, maybe they’ve owned other businesses, and they’re looking at franchising for the first time, oftentimes, they’re looking at business ownership for the first time, and you guys want to make sure franchisees are a fit. People want to make sure that they’re a fit for the franchise that they buy. What advice would you give around questions that a prospective franchisees should be asking of you and any franchise so that they’re really making sure they’re choosing something, your brand or another brand, for the right reasons?

Chris Pena:
So I think I’ll jump in here first, just from my experience. And I think Bob certainly has to weigh in here because he’s… I mean, I don’t know if there’s many people in this country who’ve been able to help as many franchisees find a successful business as Bob has. But in my short stint, I think the three things that somebody should look for, A, is white space. We’re in fitness. Fitness is a very cluttered space. How are you going to differentiate and how are you going to create room for the brand that you’re going to buy? Part two is financial vehicle. Does that brand make money? How long will it take me to make money? One of my biggest pet peeves when I talk to people is there’s a theme in franchising where people talk about percentage EBITDA. That’s a vanity metric. We want to look at how much money are you putting in and how much will you get back every year? What is my percentage return cash on cash?
And then I think part three, this is much more… I think that’s where you make your logical decision of is this a good brand? But I think where you make the actual decision is then at a discovery day where you get to meet the executive team, because a bad captain will sink any ship. Doesn’t matter how great of a ship it is. And so you have to believe in their vision. You have to believe in who they are and you have to believe that they’re going to take you to success.

Leslie Kuban:
That’s great. Right brain and left brain evaluation factors. And as we wrap up here, Bob, anything that you would like to add for our viewers?

Bob McQuillan:
Yeah. Chris’s three points were exceptional. I guess I’m going to line up next to Chris here. I would start with legal. Number one, make sure you understand the document. We are very thorough with… And Chris does a fantastic job with our FTD and financial review. Make sure you understand the numbers. Make sure you understand the legalities. Are there any lawsuits for or against the franchisor? And understand the executive team, as Chris mentioned. Number two, I would say validation. You have to talk with franchisees. And look. Ask a lot of questions. Call as many as you want. That’s what they’re there for. It’s your investment. You’re going to basically put part of your life savings on the line here. Talk to as many franchisees and as many employees as you can because you want to make sure you’re getting a consistent answer from both sides.
And then last but not least, people go into businesses a lot of times. And I see this all the time with people that have never owned a business. They think because they’ve invested in the business, it’s going to pop up and make money. Businesses are hard work even though it’s an executive model. It doesn’t matter what line of industry it’s in. If it’s an executive model, that’s great. Understand your business from the ground up. Be the face of the franchise. I mean, those are the three areas that I would turn to in addition to Chris’s. But all good advice, Leslie. You know. You’ve been around this game, and it’s got to be an eyes wide open type of investment, right?

Leslie Kuban:
I know you guys are very mindful about making sure that people coming into your business really are a good fit and poised to succeed. So I’m excited to see you grow. Really, we had a great conversation today. I’m really excited for our viewers to enjoy it as well. So thanks, guys, for coming on the show. Appreciate it.

Bob McQuillan:
Thank you, Leslie. Appreciate it.

Leslie Kuban:
And folks, I hope you’ve enjoyed this episode of Atlanta Franchise Today. Thanks for tuning in. I’m Leslie Kuban. I look forward to seeing you again next week.